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Market rebound mistaken for recovery

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The United Nations Conference on Trade and Development (UNCTAD) has dismissed the current financial market rebound as not a "real recovery", believing any economic world growth in 2010 is unlikely to exceed 1.6 percent. Supachai Panitchpakdi, secretary-general of the United Nations Conference on Trade and Development (UNCTAD) said, "The depth of the recession has been so important that of course there will be a rebound ... but we still do not see that this is a real recovery." Panitchpakdi said the actual increase in commodity price was driven by appetite for more risk. This appetite, however could be reversed at short notice depending on the rate of recovery and the outlook of the financial market. The UNCTAD report noted, "Tumbling profits in the real economy, previous over-investment in real estate and rising unemployment will continue to constrain private consumption and investment for the foreseeable future." It added global GDP may turn positive in 2010 but is unlikely to surpass 1.6 percent. The report also cut the 2009 forecast from a growth rate of 2.9 percent predicted last September to a contraction of 2.7 percent with developed economies expected to contract by 4.1 percent.

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